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Germany's $ 3 billion aid to Ukraine can only go through if it is clear where the money comes from. Scholz and Habeck oppose taking it from pensions, local government spending, or needed transportaton infrastructure spending. Greens see this kind of funding with cuts from domestic needs as a cop out. Scholz opposes cuts in pensions. CDU suggests cuts in unemployment benefits. Scholz opposes this. Germany as a debt clause in its Constitution put in by former CDU chancellor Merkel. It doesn't make sense now with the needs in infrastructure and the extra revenue that could be generated in the economy from an expanding economy that has rebuilt and updated its infrastructure. Yet it is still in place and leaves Germany less able to cope with demands for security, defense, and for infrastructure, modernizing its economy. By contrast the US under Biden and Trump is committed to domestic spending on infrastructure and modernization, leading to faster economic growth than in the European Union in 2025-26. ...

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China sees the situation in Hong Kong spiralling out of control after two months of protests and leading to a loss of China's sovereignty in Hong Kong. The Chinese official in charge of Hong Kong Affairs in the State Council, Zhang Xiaoming, met with the Hong Kong government representatives in Shenzen and made it clear offering a dire assessment and the most severe since China resumed sovereignty over Hong Kong in 1997 from Britain. Zhang stated- "If the situation worsens further, and there is turmoil that the Hong Kong government is unable to control, the central government absolutely will not just watch without doing anything." He also stated that the central government had enough strength to end the unrest, that the Party center and military force if necessary is behind the Hong Kong government. Wang Zhmin, China's top official in Hong Kong gives a better view of how this is seen in the Party in Beijing. He even called it a "life and death war" comparing it to the "color revolutions" the democratic movements that unseated governments in Georgia, Ukraine and Serbia. China sees this differently than western countries. With its long struggle against colonial rule in the territory controlled by Western powers along China's coastal region, China's ruling party leaders have a very different perception of the situation than is shown in most western media, particularly during the two decades of China's reconciliation with Japan and the U.S. in its effort to catch up. In the rest of the world the perception is very different. The use of a military garrison or riot police from other parts of China would affect China's image carefully built up over two decades of a peaceful developing country working hard to catch up in living standards and technology. As the economy slows to 5-6% the damage would be to business confidence and investment, and to Hong Kong's status as a world financial center. This could also affect China's relations with the U.S., European Union and Britain. with criticism on action by China. Unlike negotiations with Japan by Mr. Lighthizer for president Reagan, when Japan enjoyed a trade surplus such as that of China today (where there were no such issues with Japan as the U.S. had offered security guarantees to Japan), negotiations with China on trade could be affected by issues such as status of Hong Kong. This could lead to a worsening of trade relations, indefinite duration of tariffs and lack of any settlement on trade, further slowing the Chinese economy and hardening positions. ...

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The Nordstream gas supplies pipeline which runs 760 miles from northwest Russia under the Baltic Sea to Germany will go into maintenance for 10 days. Russia says that a turbine that is being repaired in Canada could delay resumption of the pipeline that is already down to 40% of its pre Ukraine war supply.  Germany says Russia may turn off the Nordstream pipeline completely in response to more western sanctions. Russia could attribute it to maintenance issues. Germany's manufacturing companies that depend on the gas supplies are already scrambling for other sources. Some like Uniper SE one of Europe's largest utilities are turning to the German government for aid as it turns to the spot market for supplies at much higher prices. France's EDF SA is losing billions of euros under a government imposed price cap on electricity prices. It will be nationalized. Yara fertilizer company with 15 production sites in Europe uses Russian gas to make ammonia for fertilizer. Now it is turning to other sources for ammonia, a key ingredient for nitrogen fertilizer.  WSJ gives examples of many more companies in industries in Germany from glass making to coating steel in melted zinc using furnaces powered by gas, that are affected. Two VW power plants in Wolfsburg will shift back to coal after spending 400 million euros in a conversion to natural gas. The list goes on and on. There is the need to conserve natural gas and LNG supplies to heat and power homes for the winter. Thermostats will be turned down to 62 degrees in many places in Germany, hot showers will be shortened, and every effort made for conservation, and even this may not be enough. ...

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Russian forces in Port Arthur (Dalian, Lushun) like the other European colonial powers in Tientsin took part in the joint operations of Japan, Britain, France, US, and Germany in the invasion of Peking in mid July 1901. Under the Soviet era China was an ally of the Soviet Union yet there was a strong sense of independent action that led to the breakdown of the relationship between Krushchev and Mao in the 1960's. This may be true also today as the European conflict in Ukraine may not be in China's interest of developing its economy and continuing on the path of modernity it adopted throughout the events of the 1930's to the 1990's to today. This report from that period shows the Russian army under Colonel Anisimov and General Stessel rescuing British admiral Seymour's force near Tientsin. The Russian forces under Russian Admiral Hildebrand played a leading role in the battle of the Taku forts that followed in late June 1901. The forces at Tientsin under Admiral Alekseev of about 8000 are mostly Russian. On 19 July 1901, Russia's General Linevich assumes control of the joint Japanese, Russian, British and French forces that conducted the campaign towards Peking.  The American version of the events in China in 1901 is given by Cornell University Prof. David Silbey in his 2010 book- The Boxer Rebellion, The Great Game in China. It shows the depressed condition of China at the time and the struggle to free China of the opium of British traders and conversions by Christian missionaries that undermined Chinese culture and society. The rebellion of 1901 is similar in China's history to the events of 1857 in India with the rebellion against British rule.    ...

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Greece prime minister Mitsotakis in this interview tells Reuters on May 15, that he hope the next four years will be years of rapid growth for Greece, but also one that will limit inequalities and make sure that Greece supports its most vulnerable. Greece was hit hard with higher energy costs after the war in Ukraine. It was not long ago in 2010 that Greece was daily in the news with reports of the eurozone debt crisis that affected Greece, Ireland, Spain. That crisis wiped out more than 25% of its GDP. He is credited with having managed the economy through the period after Syriza a rival party almost put Greece out of the eurozone. Lack of eurozone controls on debt of its members, lack of transparency in Greece's financial affairs were severe handicaps.  Today after a decade of austerity that it took to get its financial affairs in order including tackling over hiring in the government burreaucracy, lax financial controls, ordinary Greeks face high inflation and low incomes. Mitsotakis has raised the pensions and raised the minimum wage by 20% to 780 euros to help Greeks with the cost of living crisis. He has spent $50 billion euros in relief measures since 2020. Economic growth after reaching 5.9% in 2022 will slow to 2.3% in 2023. Mitsotakis addressed both Houses of the US Congress last year when Speaker Pelosi was in office. His image is dimmed somewhat by a surveillance of the Opposition ranks that was discovered recently and is covered in an accompanying article in the WSJ on May 19, 2023 shown on this page. The elections in 2023 are expected to bring Mitsotakis back in government with his party getting about 31% of the vote but lacking a majority in parliament. ...

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A study by Blanchard and Bernanke shows energy prices and supply chain constraints were key factors in creating the surge in inflation that happened in 2022. The Ukraine war played apart in raising energy prices . How much effect did president Biden's $1.6 trillion American Rescue Plan have on inflation? Bernanke and Blanchard say not what critics had suggested. Once energy prices were brought under control through the president's policies to $75 energy prices played less of a role in inflation. Supply chain effects also eased throughout 2022. The persistent effect remained the mismatch between supply and demand that is called The Great Resignation that came as a response from teachers, nurses, hospitality sector workers with low minimum wage on which it was hard to make a living. President Biden's payments to these workers gave them enough room to make a definite choice that they would not take the risks during the pandemic and the stress and opted for shifting to other jobs. Employers struggled to fill vacancies and raised wages in response. To reduce inflation the Fed opted to raise rates to slow the demand for goods and services in the economy which has led to a moderating of inflation from the high of 7% in 2022 to falling below 5% by April 2023. Fed chairman Powell's aggressive attitude to inflation was based on not letting an inflationary psychology set in, that could damage the interests of workers and families who had already suffered from the pandemic's effects. This is where we are today as the economy adjusts to the fight against climate change, investments in renewable energy and infrastructure, and efforts to reduce the deficit by president Biden in a way that reduces the widening gaps and social divisions in society.   ...

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 Harris's role for the Border was limited to telling Central American migrants to stay home. Much of the migration was a result of wars started in the Reagan years in Central American states of Nicaragua and San Salvador. This destabilized the region and led to gangs taking over parts of the country in San Salvador and entrenching Castro style regime in Nicaragua, leading to outward migration of young people. As this report points out Harris was supposed to take on decades of such misguided policies in Central America in a few months. A drought hit agricultural coffee regions of Guatemala increasing migration. Her role instead was to ensure several wins. Win No.1 to generate stability setting up the peaceful transfer of power in Guatemala, singling out corrupt regimes. Win No. 2 to generate jobs. US AID and IFDC loans were increased, foreign investment attracted to generate 250,000 jobs. Win No. 3 the increased stability led to gradually declining migration from Central America. What replaced it was Venezuela. And that is a repeat story of Reagan style wars in Central America. Under the Trump Administration the US did not take up the Monroe Doctrine and act directly to support a stable fairly elected government in Venezuela, an obvious solution. Instead going half way- destabilizing the government but then left it on its own. The result about a third of the population leaving the country in these years to Colombia and other parts of Latin America in a immense humanitarian tragedy.  In 2023 Venezuelans not Guatemalans entered at the US Border in large numbers, most of them middle class families that left Venezuela after hyperinflation and mismanagement of the economy. Realizing the danger by January 2024 Biden negotiated with Senate Minority Leader McConnell and his Republican representative Senator Lankford to pass legislation in the Senate closing the Border. All that was needed was the House to act and 30 years of Border problem would be solved.This was blocked in the House by new Speaker Mike Johnson on advice from former president Trump who chose to use the issue in the 2024 election. Biden then used his executive powers to close the Border leading to lower numbers of migrants under Biden by July 2024 than under Trump. Migration Border Czar was never a term used by Democrats in the Obama and Biden years. Biden who also served in a role given migration as one of the issues to handle under Obama, had this as only one of his assignments. Biden played more important roles in foreign policy with his experience as chairman of the Senate Foreign Relations Committee for decades. Border policy was made by president Obama and his advisers. The same is true of Harris, Border policy being done by president Biden and his advisers. Similar to Biden's role as VP Harris was given assignment to cover foreign policy and was the US representative at 3 Munich Security Conferences in 2021-2024 following the Russian invasion of Ukraine. Chancellor Scholz of Germany said of Harris last week that he had full confidence in Harris as both competent and experienced. ...

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Lamar Alexander, Republican Senator from Tennessee, and one of the longest serving Senators, votes against calling for witnesses in the Senate trial of U.S. president Trump. The vote against is 51 to 49, with 2 Republican senators, Collins of Maine and Romney of Utah voting for calling witnesses. Within hours of Mr. Alexander expressing his intention to vote against Republican Lisa Murkowski of Alaska decided she would vote against.  This vote was crucial in concluding the impeachment trial because of Mr. Alexander's reputation for fairness and his service as governor, university president, secretary of education, during a time when traditions of bipartisanship were honored. Mr Alexander stated his reason for his vote even though he believed Mr. Trump acted inappropriately. Was an improper decision on Ukraine by Mr. Trump at the level of treason or high crimes and misdemeanors? Mr. Alexander said it was not. Mr. Alexander shared his view saying what was on the mind of most Republican Senators including Sasse and Graham but expressed clearly- "For the Senate to tear up the ballots in this election and say Mr. Trump could'nt be on it, the country probably wouldn't accept it. It would just pour gasoline on cultural fires burning out there."   ...

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A rapid increase in the number of Russians with favorable views of the US going up past 30% as one sign of the effort to improve US Russia relations by Trump and Putin is seen in March 2025. A call by Trump to Putin will take place March 18, 2025 to start discussions on how to settle the Ukraine conflict including land, power plants and exchanges and getting to the root cause of the war- NATO expansion. Some solutions include NATO being disbanded in its current form as archaic as there is no Soviet Union, its original goal being stopping Soviets from setting pro- Soviet governments, setup in Czechoslovakia and attempts to do this in Greece and Turkey. Truman formed NATO for this purpose in 1949 after the Berlin Blockade by Soviets. WIth nuclear arsenals being replenished in Russia and China, India, Japan, small nuclear states such as North Korea, Pakistan, the situation is different today with responsible policies needed today on this issue which are impeded by the idea of NATO on the borders of Russia and the Eastern European and British view of Russia as the pre-eminent threat not shared by India, Brazil, China and the new administration of DJT in the US. A long period of peaceful coexistence and arms control developed in the late 1960's, 1970's and 1980's between the US, German Federal Republic and Soviet Union/ GDR Germany. ...

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NATO was formed in the days of the Truman administration on 25th July 1949, following the Berlin Blockade, the coup in Czechoslovakia by Soviets, and the efforts to set up pro soviet governments in Turkey and Greece. It accomplished its purpose by pushing back against the Soviet effort securing democracy in Greece and Turkey in the 1950's. Much of this was achieved under Heads of NATO from the US- Gen. Eisenhower, Gen. Ridgway, Gen. Guenther and Gern Norstad proteges of Ike all from West Point by 1964, when Brezhnev was new head of Soviet Union and by 1991 Warsaw Pact of Soviets setup in 1955 was dissolved yet NATO was not. The US interests shifted to Asia - Gen MacArthur leading a UN effort in Korea and the US leading its own effort in Vietnam in the 1960's. The Soviet threat actually receded after 1964 when Brezhnev became head of Soviet Union till 1982. During that period in the 1970's till today the face of NATO as today was from a series of heads of governments of Dutch Stikker in 1970's or other small European states such as Norway Stoltenberg and Rutte Netherlands again in 2025. It could be said that none of these leaders  of small EU countries represented US interests- or even European interests- a point the DJT administration is trying to make. It hurt the US in Venezuela as Russia propped up a regime which led to millions of refugees entering the US illegally. And it hurt Europe as Russia propped up the Syrian regime with millions of refugees entering Germany and destabilizing its political structure. Going back if a new defense institution was set up to replace NATO by the Europeans in 1970's this would have been the right step which would have not led to Russia propping up regimes in the Americas or the Middle East. A goal that is being discussed with Russia by the DJT administration to refocus American efforts in a new direction and pause not just the Ukraine war but also put the US  and Russia in a new direction with the new competition from 3 billion people in China and India. WSJ Editorial Board takes the British position on the Ukraine peace proposals with centuries old skeptical attitude on Russia's intentions. The US government position put forward by DJT is that there are constructive discussions with Russia, and the need to settle the underlying issues behind the conflict. This includes NATO's future. NATO setup in 1949 for Soviets,  on the borders of Russia in 2025 after the end of the Cold War when its rival the Warsaw Pact set up in 1955 of the Soviets was disbanded in 1991. The British position comes from centuries of conflict in Europe and its interests in protecting its Empire till the 1950's remaining unchanged, and cannot reflect American interests in the 21st century as its economy competes with China and India and the EU, and seeks to do this by keeping former colonial powers out of the Americas including Russia, and China.   ...

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IBM's sales increased in the 4th quarter 2007 by 10% to $28.9 billion and profits by 24%. What is behind this surprisng result when the US economy is seeing recession conditions and tech spending is affected? IBM's globalization strategy is paying off, it is no longer dependent on the US economy. Even to a much larger degree than companies like HP and Intel which get more than half their sales abroad, IBM has recently pursued an aggressive internationalization strategy. Even more than most companies seeing globalization affect the way they operate and expanding aggressively overseas- including companies like GE which see great scope in infrastructure spending in Asia- IBM has pursued internationalization with a vengeance. It has focussed on India, and there its growth has been breathtaking, taking talent away from Indian software companies that only recently were eating IBM's lunch. See the recent link on this. Today IBM has 73,000 employees in India. As the Indian ruppee has strengthened and other currencies aborad strengthen vs the US dollar IBM benefits from currency gains. Note that half of the revenue gain came from currency gains. This exaggerates even more the gains in getting sales and talent overseas. Whats next in IBM's plans? IBM will invest $1.6 billion in the next stage of emerging market expansion in Ukraine, Vietnam, Ecuador, Venezuela, Poland and the Czech Republic. The selection of countries is significant. Ukraine, Poland, And Czech Republic are attractive places for foreign investment and so is Vietnam. Analysts see this level of globalization of sales leading to a different response to recession type conditions in the home market. Instead of across the board cutbacks tech companies will be selective in their cutbacks. In many ways IBM leads the way and a pattern is being set for the whole of US business.The auto industry that emerges in the next few years will tend to look more and more like these tech companies with half or more sales generated abroad, and similiarly for other industries. ...

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Ilan Berman, vice president of the Foreign Policy Council in Washington D.C., cites former finance minister Alexei Kudrin about capital flight from Russia reaching as high as $160 billion in 2014. This is a result of Russian policies in Ukraine that are creating a high degree of uncertainty and investor fears about the Russian economy. The result Kudrin says would be a stagnating economy. This follows the emerging market crisis in the beginning of 2014, which hit Turkey, Argentina, and Brazil. Kudrin is respected for his efforts to strengthen Russia's finances in Putin's first term in office, and left the administration over disagreement with prime minister Medvedev on damage to finances from higher defense spending. This suggests Putin and Medvedev in their first terms as president conducted more prudent policies for the economy than they are doing in Putin's second term. A certain recklessness seems to have crept in as many respected advisors from that period have left over differences in policy, including how protests and the opposition's views should be handled. This includes Medvedev's early efforts after elections for dialogue with the opposition parties which were set aside by Putin. The danger with having a Bolivarist class of tycoons as in Venezuela and some developing countries, instead of wiser heads around him for Putin, is that he will lose the advice and counsel he so badly needs to conduct policies without letting emotions getting the better of a sound judgement. A large foreign exchange reserve is a buffer for Russia, but this needs to be used to diversify the economy away from dependence on oil and commodities by investing in technology industries to create jobs in other fields, and not wasted in higher defense spending and fighting investor sentiment for the value of the ruble. It also shows that there is an inherent value in having a "loyal opposition" and "shadow cabinet," and these institutions were not invented over centuries of practice in government without a reason, in that they actually help the governing administration pursue prudent policy without arbitrary actions. The irony is that the very fears of 1998 repeating itself with the "chaos" of western style democracy and politics and manipulation by oligarchs- a Putin complaint- is reversing the gains made by Russia since then, with another set of tycoons and vested interests in place. Russians, like the Germans can learn to make democracy work without a centuries long history of democratic traditions, elections and free media. Czarist traditions can be overcome just as the Prussian traditions were overcome, and Russians can come up with their own Wily Brandts and Gaucks, leaving behind the old history of suppressing contrary opinions. For this to happen Russians including Mr. Putin need to leave their own fears behind, and trust the Russian people for the right instincts and values and maturity of judgement, just as the Germans have done and succeeded. ...

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The U.S. and the EU join together for stronger economic sanctions on Russia. The sanctions affecting large Russian banks ability to raise capital in financial markets are likely to affect the Russian economy. Russia was suspended for export credit and development finance. VTB Bank was one of three more Russian banks added to the list of banks with economic sanctions. The EU took similiar action against Russian state owned banks and imposed an arms embargo in July end 2014.

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Indian Finance Minister Nirmala Sitharaman is interviewed by Ashok Malik for the Economic Times in this videocast. On what India did right and lessons learned from addressing the pandemic and the supply chain crisis, inflation, Sitharaman says-Getting input and listening to people about what was needed and the pain, was critical in developing the financial plans. On the realization of India's potential in manufacturing, exports, and industrializing its economy, Sitharaman says-India's strength is its rule of law, so that the country is tolerant of criticism including of the prime minister, and there are democratic institutions that protect ordinary citizens, the business and other sectors. Also important is friend shoring as expressed by US Treasury Secretary Yellen alongside Sitharaman, that sees India as a favored destination for the US and the EU. The efforts to develop first rate infrastructure and logistics removes impediments to foreign investment. Training and education of workers is part of this effort to create a supply of trained labor for foreign investment factories in India. The competition between states is also part of this effort to build attractive locations for foreign investments in manufacturing in India. On 20th century financial institutions transforming into 21st century institutions for the IMF, the World Bank and other international financial institutions Sitharaman says- India has full support from all G-20 countries on debt crisis of countries in Asia and Africa, Latin America to change the way in which help is provided. And the skills are put in place to access financial markets on terms that help meet the aspirations of the people in poor countries or middle income countries, including some G20 countries such as Argentina. Sri Lanka she says, is an example where India is the governor and representing the country at the IMF and World Bank for its financial needs. India took up the interests of Sri Lanka with the G20 and the US, so that the loans are not delayed or given in ways that lead to the country exiting the program, unable to meet the aspirations for development of its people. Sitharaman says the G20 found complete agreement on 15 issues facing the world out of 17 issues, these two related to the war in Ukraine and that too from only 2 countries. This suggests that the media focus creating a general perception of lack of unanimity does not reflect what happened at the G20 meetings in India, and is distorted. What really happened is that all countries agreed on the substantial economic issues facing the world- of food insecurity, of development needs, and of climate change impact.  Sitharaman's responses showed optimism based on the hard work put in at the Finance Ministry and connected to all ministries and agencies of the government. And of a resilient attitude, of concentrated effort on the issues facing India and its partners in growth in the US and EU.  ...

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Laurence Peter of the BBC News describes a meeting of EU leaders in December 2016. The new Europa building with its space egg shape will be the location of the next summit in 2016, adding to a sense of history that the EU idea has witnessed since the 1950's, even optimism about far it has come at a time of a few setbacks.  He points out that Theresa May was not without persons to talk to at the meeting, though some video clips showed her looking lonely. EU president Martin Schulz said he was emotional seeing students crying after the Brexit vote, but that it was time to find solutions and not be emotional today. Lunch was offered at the meeting by Spain and Portugal, to mark the 30 years since they joined. People forget how much the European Community meant to the two countries after decades of suffering under fascist dictatorships- it meant new hope and an opportunity to set things right. Problems facing the EU today include, the frustration at the carnage in Aleppo, Syria, how to deal with Britain and Brexit, setting up an asylum system that will work, dealing with Ukraine and Russia without making the situation worse, and remaining concerns about the Greece debt crisis. ...